I came here to ask the same question, but found my own answer, which I will now share and hopefully it helps. I shouldn't even have to deal with this but Virginia has it's threshold set to $600. Insanity for everyone in this state. I'm angry at how these are being formatted, but I figured it out and it's a massive headache. Paypal lists me has having $40.27 in profit in June, a month in which I sold one item. Yet my activity shows I collected $36.52 from that transaction. THE BUYER PAID $40.27. -$1.47 Paypal Fee -$2.28 Tax collected by ebay = $36.52. Meaning, Paypal is not subtracting the fees they collect or the taxes ebay collects from our 1099k forms.
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